1) auditors do uncover errors. sometimes those errors leaad to firings and restatements. An entire company does not need to be complicit with fraud, for there to be fraud. key employees commit fraud to enrich themselves or make their numbers look better. from that perspective, the board does benefit from existing audits.
Also audit is highly regulated. If the standards are too loose the PCAOB can come in and punish you severely.
Its the pervasive cases, the wirecards, that are hard. Those are the frauds that are pervasive and go to the top, and include auditors that are not pushing back. These are the true landmines.
How are they addressed? Many ways:
A) There is a layer of prevention, where audit firms will force rotation of their lead audit partners on an audit every 2-3 years to prevent cozy relationships.
B)
And theres Also the "audit the auditor" where another partner has the sole job of reviewing the work done. He's the landmine hound looking for explosives.
2) the insurance business actually rakes in profits typically after a large disaster, when premiums are sky high and customers are are hyper aware of the risks (and Boards unforgiving with CEOs that fail to mitigate the risks.